(last updated July 2019)
What has been happening in the electrical goods sector?
The number of independent electrical retailers has been falling for some years now. The main reason for this is the strength of multiple chains (particularly the market leader Currys/PC World) and very strong competition from non-specialist outlets like Argos and supermarkets including Tesco and Asda. Online retailers have also become a very strong presence in the electrical goods market, with the specialist Ao.com (previously Appliances Online) becoming a major presence on the web. Shoppers have become used to buying their electrical goods at discounted prices, so it has become really difficult for independents to compete on price and ever more important for them to offer top quality customer service.
Other types of retailer have become big sellers of electrical goods too, particularly 'pay-weekly' credit-based retailers like Brighthouse.
Unfortunately, the economy and the housing market took a sharp downturn in the late 2000s and conditions remained very difficult during the early 2010s. People cut right back on their spending, and were particularly reluctant to buy large expensive items and upgrades that they didn't really need. Low demand drove prices and profit margins right down. This had a real effect on the electrical goods industry and even the major chains felt the pressure - Comet went into administration towards the end of 2012 blaming the difficult economic climate and the strength of online competition, while the US giant Best Buy pulled out of the UK in late 2011 after an unsuccessful attempt to crack the UK market.
Despite the doom and gloom, the digital television switchover - which started in 2008 and ended in 2012 - provided a welcome sales boost for some. And 2013 saw things begin to improve as the economy showed signs of picking up at last. The economy continued to strengthen during 2014 and into the first half of 2015 but slowed in the second half of 2015 and into 2016. The vote in June 2016 to leave the EU added further uncertainty to the economic outlook. Tough trading conditions continued during 2017 as rising inflation hit household budgets and consumers became more cautious about spending on big ticket items. Sales remained lacklustre during 2018 despite widespread discounting.
Recent years have seen retailers in the UK embrace the 'black Friday' and 'cyber Monday' promotions as a means of boosting sales during the run up to Christmas. It now seems to be more or less essential for retailers like electrical goods specialists to offer generous discounts for at least a few days at the end of November.
The environment and WEEE
The Waste Electrical and Electronic Equipment (WEEE) Regulations were introduced in 2007 with the aim of reducing the impact of waste electrical and electronic equipment on the environment. The regulations were re-worked in 2013 and 2018, although this didn't involve too many big changes for retailers. Retailers that sell electrical and electronic products to domestic customers are required to:
- give information about WEEE
- provide a free like-for-like take-back service for waste electrical goods or join the distributor take-back scheme
High energy prices and concerns about the effects of climate change have seen more and more people choose electrical goods on the basis of energy efficiency.
You can find out more about the requirements of the WEEE regulations on the Valpak website.
In 2010 similar take-back requirements were introduced for retailers who sell more than 32kg of portable batteries each year.
The mid to late 2000s and first half of the 2010s saw the laws protecting consumers tightened up, with tougher rules on warranty sales and extra protections for people who buy products 'at a distance' through the web (including on eBay) or from a catalogue. It's essential for electrical goods retailers to make sure they comply with all the requirements of the regulations.
Electricity prices have risen sharply in recent years and are still going up, prompting people to shop around for energy-efficient models when they buy new electricals. More and more electrical goods are now rated for energy efficiency under an officially-recognised rating scheme.
September 2014 saw new EU energy efficiency rules come into force banning the sale of vacuum cleaners with motors that exceed 1,600 watts. This was reduced to 900 watts from September 2017 but retailers could carry on selling any higher wattage vacuums they had in stock at that date.
Keeping up to date with the electrical retailing sector
Joining a trade association is an excellent way of keeping up with developments in your industry.
The Radio, Electrical and Television Retailers' Association (RETRA) represents electrical retailers in the UK. You can contact them through their website.
If you sell audio equipment you could consider joining the Clarity Alliance. Visit their website to find out more about the services they offer to members.
Subscribing to a trade journal is another excellent way of staying up to date. Trade journals for electrical retailers include ERT Magazine and Innovative Electrical Retailing. You can find out more about both of these publications on their websites.
You can get a lot of useful information by visiting a trade fair. You will be able to meet manufacturers, suppliers and importers and plan your future stock buying. Information about forthcoming trade shows is available on the Exhibitions UK website.